Local interests, central leadership, and the passage of TRA86

The U.S. federalist public economy is an ever‐evolving system of financing and expenditure responsibilities between local, state, and federal governments. The past decades have seen a significant centralization of responsibility for the financing of state and local public services through grants‐in‐aid and federal tax subsidies. This article advances a model of local constituent influence in central government fiscal policies which seeks to explain this trend, and then examines how strong executive branch and congressional leadership might begin to control the local pressures for central government financing. TRA86 is offered as one example in which this leaedership proved effective. The general lesson is that good fiscal policy in federalist public economies requires not only capable local governments, but central government political institutions with the strength to meet national needs as well.